1. Global Imbalances and the Financial Crisis
- Author:
- Steven Dunaway
- Publication Date:
- 03-2009
- Content Type:
- Working Paper
- Institution:
- Council on Foreign Relations
- Abstract:
- The current economic and financial crisis has brought about a significant change in global economic governance as the international forum for discussions on the crisis has shifted from the small group of advanced countries in the Group of Seven (G7) to the Group of Twenty (G20), a broader group including important emerging market countries. The G20 summit held in Washington, DC, on November 15, 2008, dealt with the immediate concerns fostered by the crisis and focused on both macroeconomic policy actions needed to support global growth and ideas for implementing financial market reforms. Follow-up G20 summits are expected, starting with a gathering in the United Kingdom in April 2009. However, for these discussions to have a substantial impact, the agenda will have to be broadened beyond economic stimulus and financial market regulation. If not, global policymakers will miss a critical chance to make the world economy and financial markets more stable, as then U.S. treasury secretary Henry M. Paulson Jr. pointed out: If we only address particular regulatory issues—as critical as they are—without addressing the global imbalances that fueled recent excesses, we will have missed an opportunity to dramatically improve the foundation for global markets and economic vitality going forward. The pressure from global imbalances will simply build up again until it finds another outlet.
- Topic:
- International Relations, Economics, International Political Economy, and International Trade and Finance
- Political Geography:
- United States and China